No more excuses: evidence shows poor countries can absorb more aid now

No more excuses: evidence shows poor countries can absorb more aid now

May 10, 2010

Rich country governments are denying clear economic evidence and using every excuse to avoid immediately increasing their aid to poor countries, Oxfam said.

"In recent days we’ve heard from Paul Martin the bureaucrat. Now let’s hear from Paul Martin the world leader," said Oxfam Canada’s Mark Fried. "We can save the 30,000 children who die every day from extreme poverty, but only if Mr. Martin stops offering excuses and makes good on the promise to increase aid to 0.7% of GNI. The world is watching."

As G8 leaders prepare to gather in Gleneagles, Oxfam said arguments by Canada and other governments that poor countries cannot absorb an immediate and substantial increase in aid were contradicted by economic evidence, including studies by the United Nations and the World Bank.

"Saying that poor countries can’t absorb the money is a convenient excuse for G8 governments," said Oxfam Policy Adviser Max Lawson. "This is a matter of justice and what millions around the world are demanding but it’s also what the experts say must be done."

Oxfam pointed to a series of studies showing how poor countries can absorb more aid now:

Following detailed studies in 2002, the World Bank said that poor countries could absorb – and spend effectively – an extra $30 billion a year immediately, rising to $50 billion in 2006.

The United Nations made it clear in their 2005 report for the Millennium Summit in September, based on the detailed analysis by more than 250 experts worldwide, that poor countries can absorb an extra $50 billion annually from 2006 rising to $100 billion in 2010.

UNAIDS released a report last month showing how poor countries have the ability to effectively spend an extra $15 billion in 2006 to fight HIV/AIDS, rising to $18 billion in 2007 and $22 billion in 2008.

Education is another clear example where several poor countries have already produced detailed, costed plans to get their children into primary school. In a program agreed by rich countries in 2002 known as the "Fast Track Initiative," these plans have been approved by rich country governments and the World Bank but are still desperately under-funded.

Mozambique has managed to double the number of children going to school since emerging from civil war in 1992, but still has one million children out of school and faces an education funding shortfall of $200 million next year.

The World Bank report in 2002 looked in detail at health, education and water and sanitation focusing on the ability of countries in Africa and elsewhere to immediately spend extra aid money effectively in these areas.
The UN Millennium Project reported in January 2005 following extensive studies by a series of task forces involving 250 experts from universities worldwide. This report focused on each of the Millennium Development Goals, looking at progress and how much funding is needed. Overall the conclusions were that an immediate increase of $50 billion extra in foreign aid was needed to support country based poverty plans and that this should rise to $100 billion extra each year in 2010.
The first 12 countries to have their education plans approved under the Fast Track Initiative face a collective shortfall of $300m per year and a cumulative gap of nearly $1bn for the first three years of their universal primary education programmes.
With this year’s funding shortfall for basic education, Mozambique could have built 11,000 new classrooms, paid subsidies for nearly 500,000 AIDS orphans to stay in school, funded HIV/AIDS prevention in thousands of schools and trained 1300 extra teachers to replace those lost to AIDS.